Shares of Tesla Inc. TSLA might be in for a rough week, according to the Managing Partner of The Future Fund, Gary Black, following the announcement of steep discounts by the company’s Chinese rival.
What Happened: Black took to X on Monday, addressing concerns regarding the latest price war in the highly competitive EV market and its impact on Tesla. He was referring to Chinese automaker BYD Auto Co. Ltd. BYDDF and its recently announced discounts ranging from 6% and 20% across its EV franchises.
He notes that shares of BYD are down 7.7% in the Hong Kong stock exchange, which he attributes to the price cuts that are set to last until June 30. He also says that these cuts “will likely be matched by Chinese EV competitors,” hinting at a race to the bottom.
“This could weigh down $TSLA when it resumes trading Tuesday,” he says, despite the positive macroeconomic news, such as Trump’s decision to extend the tariff deadline for the EU, which Black believes holds limited upside for Tesla.
On CEO Elon Musk's recent pledge to re-focus on Tesla, Black states bluntly that he views the announcement as a “non-event,” adding that it would do little to “change TSLA's declining delivery trajectory,” which consensus estimates peg at 1.7 million for the full-year, down 5% on a year-over-year basis.
Black also expressed skepticism over Tesla's upcoming low-cost EV, expected in the third quarter. He’s concerned that it may end up being “a scaled-down Model 3 or Model Y,” rather than an entirely new design.
If that's the case, he argues, the vehicle likely won't expand Tesla's total addressable market or attract new buyers outside its existing base.
Why It Matters: Musk’s return to the company as its full-time CEO, following a brief stint in the government has led to a 49% rally in the stock since it was first announced last month.
Wedbush Securities Analyst Dan Ives said last week that the company could be headed towards its “golden period” following Musk recommitting to the brand, predicting a $2 trillion market cap for the stock, citing its robotics and robotaxi plays.
Black, however, remains skeptical of the company’s robotaxi promises, having said last week that “Tesla’s autonomy can’t be operated hands off/eyes off in most areas of the country,” calling the company’s claims into question, along with those of other Tesla bulls.
Ross Gerber of Gerber Kawasaki Wealth Management, who was a long-time Tesla bull himself, echoed similar concerns last week, citing his own experience using the Cybertruck’s FSD (Full Self-Driving) 13.2.9, which he found to be lackluster.
“This could be an extremely difficult time for them if they don't pull off or at least convince people that they have a real robotaxi business on the way,” Gerber said, adding that he believes the stock has been “overvalued for a while.”
| Stock / ETF | Year-To-Date Performance |
| Tesla Inc. TSLA | -10.53% |
| Rivian Automotive Inc. RIVN | 17.96% |
| BYD Auto Co. Ltd. BYDDF | 78.57% |
| Lucid Group Inc. LCID | -15.51% |
| Nio Inc. NIO | -16.04% |
| Global X Autonomous & Electric Vehicles ETF DRIV | -4.82% |
| SPDR S&P Kensho Smart Mobility ETF HAIL | -2.59% |
Price Action: Tesla shares were down 0.50% on Friday, trading at $339.34. Shares of BYD Auto were down 8.59% on Monday, and have extended their decline into Tuesday, with the stock trading down 2.25%, at $415.80 HKD, on the Hong Kong Stock Exchange.
According to Benzinga’s Edge Stock Rankings, Tesla is ranked high across all metrics, besides Value, where it scores 8.76th percentile. It has a favorable price trend in the short, medium, and long terms. Click here for deeper insights on the stock and its peers.
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